The Supreme Court has held that the place where a defendant carries on business is not an independent basis for invoking a Motor Accidents Claims Tribunal’s territorial jurisdiction under Section 166(2) of the Motor Vehicles Act, 1988.

The Court dismissed a claimant’s appeal and upheld the transfer of his compensation claim from Chennai to Chittoor, holding that the insurer’s business presence in Chennai did not justify entertaining the claim there.

The Court was hearing a claimant’s appeal against a Madras High Court order setting aside the Chennai Tribunal’s ruling on territorial jurisdiction and directing transfer of the proceedings to Chittoor. The dispute concerned whether a claim under Section 166 of the Motor Vehicles Act, 1988 could be entertained in Chennai because the insurer carried on business there.

A Bench of Justice Ujjal Bhuyan and Justice Atul S. Chandurkar observed: “While a claimant can file a claim application also at the place where he carries on business, he may also choose to file it at the place where the defendant resides. The place where the defendant carries on business has been specifically omitted while specifying territorial jurisdiction of a Tribunal. Section 166(2) is distinctly worded from Section 20 of the Code of Civil Procedure, 1908 as regards the criteria for invoking territorial jurisdiction of the Tribunal. Under Section 20 of the Code, the Court within whose jurisdiction the defendant carries on business also has territorial jurisdiction to try a suit, which stipulation is not found in Section 166(2) of the Act of 1988.”

Senior Advocate A. Sirajudeen appeared for the claimant, while Advocate S.L. Gupta appeared for the insurer.

Background

The claim arose from a collision between the claimant’s two-wheeler and a mini truck in Tirupati, Andhra Pradesh. He filed a compensation application before the Tribunal at Chennai and impleaded the insurer as a party. The application recorded his address in Chittoor, where the driver of the offending vehicle was also stated to reside.

The insurer objected to territorial jurisdiction, but the Tribunal rejected the objection on the ground that the insurer also carried on business in Chennai. The insurer challenged that ruling before the Madras High Court under Article 227 of the Constitution. The High Court set aside the Tribunal’s order and transferred the proceedings to Chittoor, prompting the claimant’s appeal to the Supreme Court.

Before the Supreme Court, the claimant argued that he resided and worked in Chennai, that the Motor Vehicles Act was beneficial legislation and that the insurer’s office there meant no prejudice would result from adjudication in Chennai. The insurer relied on the address stated in the application and the absence of any cause of action in Chennai, maintaining that its objection was substantive rather than merely technical.

Court’s Observations

The Court relied on United India Insurance Co. Ltd. v. Shila Datta & Others (2011), which distinguished an insurer impleaded as a party from one merely served with notice under Section 149(2) of the Motor Vehicles Act, 1988. An already impleaded insurer need not seek permission under Section 170 of that Act to raise grounds beyond those available under Section 149(2).

The Bench observed: “In a claim application filed under Section 166(1) of the Act of 1988, it is not mandatory for a claimant to implead an insurer as a defendant. The claimant has a choice in that regard. However, if the claimant impleads the insurer as a party to the claim application, the insurer would be free to contest the proceedings on all permissible grounds, without any restriction.”

Since the claimant had impleaded the insurer, the Court held that it could object to the Tribunal’s territorial jurisdiction.

Reading Section 166(2) of the Motor Vehicles Act, 1988, the Court treated the different expressions used for claimants and defendants as deliberate. It distinguished those requirements from the defendant-business criterion in Section 20 of the Code of Civil Procedure, 1908.

Explaining the permissible venues, the Court observed: “The aforesaid provision indicates that a claimant has an option to file a claim application either before the Tribunal having jurisdiction over the area in which the accident occurred or the Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides.”

Interpreting the defendant-residence clause in Section 166(2) of the Motor Vehicles Act, 1988, the Court held: “As regards use of the expression ‘within the local limits of whose jurisdiction the defendant resides’ in Section 166(2) is concerned, it is clear that the same does not intend to refer to an insurer as a defendant. This is in view of the fact that impleadment of an insurer as a defendant in a claim petition is not mandatory but is optional at the choice of a claimant as laid down in Shila Datta and Others (supra).”

The Bench identified the owner and/or driver of the offending vehicle as the principal contesting defendants, amongst others. It also relied on Section 168(1) of the Motor Vehicles Act, 1988, which requires notice of the claim application to the insurer even where it has not been impleaded, ensuring that the insurer learns of the proceedings irrespective of its party status.

The Court noted the summary procedure contemplated by Section 169 of the Motor Vehicles Act, 1988 and the relevance of general principles of the Code of Civil Procedure, 1908. It distinguished the statutory jurisdictional requirements before adjudication from the additional threshold under Section 21(1) of the Code when jurisdiction is challenged after an award.

The Court explained: “However, when an objection to territorial jurisdiction of the Tribunal is pursued at an appellate stage or at any later stage after the award is passed, the requirements prescribed under Section 21(1) of the Code have to be satisfied. Besides showing that an objection to the competence of the Tribunal based on territorial jurisdiction was raised before it, the adjudication undertaken by the Tribunal despite absence of territorial jurisdiction has resulted in failure of justice is also required to be shown.”

The Bench distinguished Mantoo Sarkar v. Oriental Insurance Co. Ltd. and Others (2008), Malati Sardar v. National Insurance Company Limited and Others (2016) and Balveer Batra v. The New India Assurance Company and Another (2024), explaining that the jurisdiction objections in those cases were considered at the appellate stage. Here, the claim awaited adjudication on merits and the insurer had objected before the Tribunal itself. The Court held that Section 166(2) of the Motor Vehicles Act, 1988 governed the objection and Section 21(1) of the Code was not attracted.

Applying Section 166(2) of the Motor Vehicles Act, 1988 to the pleadings, the Court noted the claimant’s Chittoor residence, the accident in Tirupati and the driver’s Chittoor residence. There was no averment that the claimant carried on business elsewhere and no pleaded cause of action within Chennai. The Bench held that the High Court had rightly corrected the Tribunal’s jurisdictional error.

Addressing the claimant’s reliance on the beneficial character of the legislation, the Court observed: “It is true that the Act of 1988 is a piece of legislation intended at redressing the hardships flowing from a motor vehicle accident, amongst other objects. It must be interpreted keeping these objectives in mind. However, an interpretation which does not flow from the plain reading of the statutory provisions despite a purposive interpretation cannot be commended. An interpretation that does not find any statutory support cannot be accepted and an interpretation that is in tune with the plain language of the statute ought to be preferred.”

Conclusion

The Court upheld the Madras High Court’s order and the direction to transmit the entire proceedings from the Tribunal at Chennai to the Tribunal at Chittoor. It directed that the compensation application be tried at Chittoor expeditiously and in accordance with law.

The civil appeal was dismissed without any order as to costs. The pending interlocutory application was also disposed of.

Cause Title: K Rashik v. National Insurance Company Ltd. and Another (Neutral Citation: 2026 INSC 996)

Appearances

Appellant: Senior Advocate A. Sirajudeen; AOR Narender Kumar Verma; Advocates C.R. Jaya Sukin, Yashika Anand, Seerat Nissar Bhat, Pallavi Talwar, Sangita Malhotra, A. Balaji, Satheesh K. R., Abhishek Tyagi, Praveen Kumar L., Laveena Tak, M. Dhandapani and Roshan Chapagain

Respondents: AOR Sanathana Bhaarath; Advocates S.L. Gupta, R.S. Sravan Kumar and V. Kiranmaye

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